In this article, we will discuss how to become a non-resident of Canada. In order to become a non-resident of Canada; there is a requirement to end-up all primary ties and most of the secondary ties to Canada. We have further elaborated what includes in Primary ties as follows:
What includes in Primary Ties to Canada?
- Personal residence that can be either rented or owned in Canada
- A spouse or common law partner living in Canada
- Dependents who are living in Canada
What includes in Secondary Ties to Canada?
Secondary ties may include the following items:
- Driving License
- Health Card
- Credit Card
- Bank Account
- Pension Plans
- Other Personal Possessions
Severing your residential ties with Canada
Severing your residential ties with Canada means that you do not keep your main ties with Canada. This could be your case if:
- You dispose of or give up your home in Canada and establish a permanent home in another country
- Your spouse or common-law partner or dependents leave Canada
- You dispose of personal property and break social ties in Canada, and acquire or establish them in another country.
If you leave Canada and keep residential ties in Canada, you are usually considered a factual resident, and not an emigrant. However, if you are also considered to be a resident of another country with which Canada has a tax treaty, you may be considered a deemed non-resident. Deemed non-residents are subject to the same rules as emigrants.
When do you become a non-resident?
When you leave Canada to settle in another country, you usually become a non-resident for income tax purposes on the latest of:
- The date you leave Canada
- The date your spouse or common-law partner and/or dependents leave Canada
- The date you become a resident of the country you settle in
If you lived in another country before living in Canada and you leave Canada to resettle in that country, you usually become a non-resident on the date you leave Canada. This applies even if your spouse or common-law partner temporarily stays in Canada to dispose of your home.
If you want to become a non-resident of Canada, you need to fill out the Determination of Residency Status Form i.e. Form NR73 with the CRA.
In lieu of filling Form NR73, you may file a departure tax return with the CRA in order to become a non-resident of Canada.
Sohail Afzal, CPA, CMA, MBA
Sohail Afzal, (CPA, CMA, MBA) is the founder & CEO of GTA Accounting Professional Corporation. He is a highly experienced Chartered Professional Accountant and businessman himself and understands the challenges that many businesses face when it comes to cash flow management. As an experienced business consultant & tax advisor, he is helping companies grow by providing the technical, financial, and contractual information necessary for strategic decision-making.